Using Action Plans to Measure Return on investment The Coca-Cola Bottling Company of San Antonio By Scott B. Parry Supervisory training with action plans is a common approach to building skills and applying them successfully on the job. The following case illustrates the sig nificant payoff for supervisory training and represents a classic application of action planning from a firm that has advocated the process for many years. As shown in this case, a program that is designed properly and implemented care- fully, with evaluation built in, can often generate high returns. Background As part of a five-day workshop for presidents and general managers of its franchised bottlers, The Coca-Cola Bottling Company of San Antonio surveyed participants to determine the developmental needs of their employees. In every location that the workshop was conducted, results were identical: The need for supervisory training led the list. Several reasons were cited. No such program existed. Some bot- ters had hired local consultants or professors to run courses for their supervisors with little or no effect on performance. Supervisors are the primary source of training for all other employees. The legal implica- tions and cost of poor supervisory practices were rising at a rapid rate. Finally, the era of father-to-son-to-grandson management of bottling plants was drawing to a close; future managers would come from the ranks, not from the family that owned the franchise. In response to this need for supervisory training, The Coca-Cola Company selected Training House Inc. as the consultants who would develop a series of half-day workshops to be run by bottlers. Because most of the franchised bottlers do not have a professional trainer on Using Action Plans to Measure Return on Investment. 187staff, the workshops would be designed to be taught by members of senior management—department heads and officers. Detailed instruc. tor guidelines and train-the-trainer workshops would be needed to make the program as user-friendly as possible. Training House surveyed the bottlers, using a questionnaire to rank a list of 20 supervisory needs as high, moderate, or low. These data were analyzed, and the top eight topics were selected for devel. opment. A year later, the IMPACT Supervisory Series was ready for distribution. This case study outlines the procedures followed and the results obtained during the pilot test in The Coca-Cola Bottling Company of San Antonio Needs of the Organization Although the needs analysis conducted via questionnaires was use- ful in identifying the developmental needs of bottling plant supers sors, the San Antonio bottler also had a number of organizational needs that it hoped training could address. With a market of more than a mil- lion customers, the company had been growing rapidly and had formed several new divisions (food service, canteen vending, lunch trucks, and metered bar service). Because of this new growth, there were many newly appointed supervisors who were more comfortable handling their old jobs than supervising people. As a result, senior managers were handling problems that should have been resolved at the supervi- sory level. Another organizational need sprang from major changes in the way the products reached market. In earlier times, the bottlers of Coca- Cola relied on route salesmen to take orders, deliver products, and stack the shelves in larger outlets. The proliferation of many new prod- ucts and package sizes, however, had led to a reorganization of the means of distribution. Sales were now made by telephone (tel-sell rep- resentatives) and by face-to-face calls (customer service representa- tives). Deliveries were made by three types of trucks, depending on out- let size. And the stacking and displaying of products in the outlets were handled by a newly created position: merchandiser. This reorganization created new supervisory positions and led to the need for training. Newly appointed supervisors often show stronger allegiance to their team of employees than to management, whose ranks they have recently joined. This factor weighed heavily on the minds of senior management. The company had managed to resist past efforts by the union to organize the employees. The prior vote had been very close, however, and management feared that the uncertainty surrounding the 158 ASTD Case Studies: Measuring Return on Investment, Volume 1reorganization and the supervision that employees were receiving could give the union the edge they needed to win the next election, about six months away. Program Implementation Twelve members of senior management were selected to serve as instructors. They included the executive vice-president, Bob Alford, and his division heads and officers. These 12 were participants in the first cycle of the course, taught by the president of Training House. Their focus was on content and process: what to teach and how (instructional methods, media, techniques) to teach it. The group agreed to use team teaching, with two managers assigned to, each of the eight modules of the course listed in Table 1. (Some of the managers were responsible for more than one module.) With 64 supervisors to be trained, the bottler divided them into four groups of 16 participants each. Table 1. The eight half-day workshops in the IMPACT Supervisory Series. «Your Role as Supervisor ‘© Conducting Performance Reviews © Defining the Job and Performance Criteria © Motivating and Managing Others ¢ Setting Goals and Standards ‘© Managing Your Time Effectively © Training and Developing the Team ‘© Personnel Policies and Procedures Participants attended class one week and met with their managers individually the following week to agree on how to implement the actions they planned to take as a result of the workshop. Thus, every other week brought a different module, and the entire IMPACT pro- gram took 16 weeks to administer. For each workshop, the slides and audiotape script that provided the concepts and informational input were followed by hands-on learning exercises: role plays, case studies, games, simulations, script analysis, and action plans. The selection of slides enabled each bottler to use locally shot slides, thereby customizing and personalizing the instruction. Another benefit of the slides was that they were used interactively. After each key learning point (every six to eight slides), a “discussion slide” came on the screen and posed two or three questions. By spending three to four minutes discussing these questions, the instructors enabled the par- ticipants to apply new concepts and skills to their own jobs and employees. Using Action Plans to Measure Return. on Investment 159Detailed instructor guidelines made it possible for the botler’s ‘own senior managers to deliver the workshops with confidence and competence. This practice enhanced the credibility and relevance of each module. Participants knew that the program was important enough for the “top brass” to be teaching it, and senior managers drew on their own experience to illustrate the learning points Action Plans: Key to High Transfer Transfer of training refers to the degree to which participants apply in the workplace what they acquire in a workshop. Most trainers estimate the degree of transfer for “soft skills” courses such as supervi- sory training to be relatively low: 20 percent to 40 percent, according to a survey of more than 1,000 training managers. In short, they see litle return on investment for such courses. To overcome the tendency of supervisors to view training asa spec- tator sport (i.e., watching an instructor perform), Training House built action planning into each module of the IMPACT Supervisory Series. This approach views participants not as empty vessels waiting to attend class and be filled with new concepts and skills, but rather as change agents and catalysts who are being equipped with tools and techniques that they will apply back on the job. The vehicle for accomplishing this application was the action plan. At the end of each workshop session, cach participant completed this form (or “transmittal document’). Participants then took the document back to their managers and sub- ordinates for discussion and eventual agreement on how new tools and techniques acquired in class could best be transplanted and put into action on the job. At the start of each new workshop, participants got out their action plans and discussed the results of their meetings with managers and subordinates, working in subgroups of three or four persons each. These action plan reviews served several useful purposes: © They provided continuity to the course by reviewing the prior ses- sion’s content. They placed emphasis on applying concepts and skills, not merely acquiring them. © They gave instructors feedback on where participants needed help in putting skills into practice. © They enabled instructors to follow up with managers who were not meeting with participants. © They reinforced participants for investing the extra time needed out- side class. 160 ASTD Case Studies: Measuring Return on Investment, Vobume 1@ They gave a meaningful way to measure the effects of the course. Action plans were a means of putting management by objectives into operation among first-level supervisors whose typical day was activ- ity-oriented and reactive, rather than goal-oriented and proactive. It was, a way of getting supervisors to manage and to launch their own pro- grams of continuous improvement. The 10 parts of the four-page action plan are listed in Table 2. Table 2. The 10 parts of the action plan. © Subject: the speci areas you have picked for improvement © Objective: what is to be accomplished, the pur pose of the plan © Goals: the specific targets by which you wil measure progress «© Froblems: the barriers that might hinder you in carying out your plan ¢ Solutions: how you plan to avoid or deal with © Resources: what people, time, equipment, et. you need to carry out the plan ‘© Activities and Time: what steps (actions), ‘sequence, and time are needed © Costs: what the overall cost of implementing your plan will be © Benefits: what benefits you expect and their estimated dollar value ‘© Commitment: when you and your manager will the problems next review progress. Calculating the Return on Investment The Coca-Cola Bottling Company of San Antonio did not make a conscious decision to calculate return on investment (ROI) following the training program. Three months after the course ended, however, the 64 supervisors gathered for a final executive briefing and gradua- tion dinner, and this occasion enabled Training House to collect data on the program's results. Each of the four groups of 16 supervisors came together for two hours, and each participant took five to 10 minutes to report on the results he or she had achieved by applying the concepts and skills learned in class and translated into on-the-job behavior on action plans (eg., increased sales, reduced waste, shorter collection times, better route planning, less absenteeism). The audience for these briefings consisted of the senior managers who had taught the program and helped their subordinate supervisors to follow through on their action plans. Using the information in Table 2, each supervisor and his or her manager calculated the cost of implementing each action plan (mostly time rather than additional expense). They also converted the benefits Using Action Plans to Measure Return on Investment 161into estimates of dollar value (savings or additional revenues). in short each supervisor's report on the eight action plans was actually a inini cost-benefit analysis of the impact of the course. Here are four exam- ples of the ROI realized by the successful implementation of the action plans: ® Marvin Rudolph reported that delinquent accounts were reduced by $100,000, resulting in a savings to the company of more than $6,000 in interest expense. © Fernando Flores reported a reduction in over or short accounts of 72 percent in the first quarter. The reduction amounted to more than $5,800 and resulted in time and effort savings for the bookkeepers in his department and for the route salespeople. © Zeff Hernandez noted a 2.4 percent increase in his vending routes at Snappy Snack because of better scheduling and rerouting for more efficiency. He expected that the combination of cost savings and increased income from better scheduling would amount to approxi- mately $20,000 for the year. * David Barnard reduced dispatching errors among the Omega truck accounts from seven per day to less than one per day. The increased accuracy resulted in savings in fuel consumption, hours lost, and trucks’ wear and tear. At an estimated savings of $45 per day, this improvement would bring an annual savings of $10,000. At the graduation dinner following the four briefing sessions, the human resource development manager and consultant tallied the total of the costs and benefits reported. The company had realized benefits of $526,000; the cost of running the training program was $34,000. In short, the benefits exceeded the cost by more than 15 to 1. Using the traditional formula yields an ROI of 1,447 percent. Senior management considered this figure conservative, because many supervisors did not attach dollar values to the benefits realized by implementing their action plans. As Alford said, “Our supervisors are not accountants, and are wary of putting a dollar value on many of the gains reported today. They see only the immediate results in their own sections and are less aware of the ‘ripple effect’ that I can see through- out the organization.” Moreover, no value was assigned to the results of the election in which the union's attempt to organize the bottler was defeated by a significant margin. Management attributed this victory to a greatly improved climate in the workplace, and saw this benefit alone as having a value over time in the millions of dollars. Perhaps the most conservative aspect of the 15-to-l ratio is the fact that most supervisors were reporting their benefits for a three-month 162 ASTD Case Studies: Measuring Return on Investment, Volume Iperiod (ie. psed since the end of the course). Most of the sav- ings and increased revenues are ongoing, however, and could be pro- jected to continue for at least several years into the future. A key lesson here is that training costs occur at one point in time, whereas many training benefits are ongoing and should be projected well beyond the life of the course. Although the reported figures are conservative, they are dramatic and impressive. Everyone at the graduation banquet felt the heady exhilaration of their achievements. Alford told the group that this was one of the most gratifying days of his life. ime Additional Nonmonetary Benefits Throughout the action plan reports at graduation, it became clear that their successful implementation had influenced the participants personally, as well as the bottler as an organization. Three significant shifts in the perception and execution of the supervisory role were tak- ing place. First, the supervisors had begun a habit that was the essence of good management: goal setting as a way of life. They set goals and standards, and took time to muster up the resources—people and materials—to achieve them. When the program was launched, many of the supervisors saw themselves as “lead workers” or “section heads"—people hired to “mind the store” rather than to manage it as entrepreneurs. This thinking had changed significantly. They were well into managing by objectives. Maintaining these practices with joint goalsetting sessions and regular review meetings would provide an even greater return on investment. Second, management had become a team sport. By mixing depart- ments, changing the seating at each meeting, using the case method and role plays from all areas of bottler operations, and incorporating reports on participants’ action plans into classes, the program had broken down isolation to form a better team. At the start of the program, supervisors did not really know each other, and sales supervisors knew less about pro- duction than the average school student after a plant tour. After com- pleting the program, supervisors perceived themselves as members of management, and perceived management as a team sport. Third, the participants no longer agreed with the common view of supervisors throughout the industry that employees are a commodity: “You need x amount of trucks, bottles, syrup, and arms and legs to run a bottling plant.” In that traditional view, if productivity is high, all is well. But when an employee's output begins to fall (or was never high enough to begin with), the average supervisor is ill-equipped to deal with the Using Action Plans to Measure Return on Investment 163problem, other than to work owice as hard to compensate. This view had changed at the company, however. A major theme of the action plans was the commitment to job definition, performance appraisal. on-the-job training and coaching, motivation through joint goal setting and review, and better time management, so supervisors could perform as supervi- sors and not as star workers. Employees were being developed, not mere- ly deployed. Factors Contributing to ROL Why was this program so successful? What did the bottler and Training House learn that can be applied to other organizations that want to see their training produce tangible results? The explanation begins by dispelling a myth. Supervisory training is not a “soft skills” course unless it is taught that way. There are hun- dreds of very specific behaviors that apply to anyone who supervises. These can be pinpointed, described, illustrated, and practiced in class, then shared with one’s manager after class so that both parties become accountable for applying these behaviors on the job. Moreover, supervisory training has the potential for a much greater effect on the organization than does skills training for nonsupervisory per- sonnel. A supervisor of 10 persons has a “multiplier effect” of 10. By improving the performance of most or all of these 10 employees, the supervisor can generate a much greater return on the training investment. A number of factors contributed to the successful ROI obtained in San Antonio. None of these factors taken alone would have had a sig- nificant effect. Taken cumulatively, however, their effects were power- ful. Here are the major contributory factors. ‘Top Management as Instructors It is the responsibility of managers to develop their staff. When they serve as instructors, their message takes on more credibility, imme- diacy, and relevance. Also, having taught the modules, they are in an excellent position to follow up for their own direct-report supervisors. The training of supervisors is too important to be left for trainers to do on their own, although they can do it in partnership with management. Some things cannot be delegated. The raising of your children is one. The development of your supervisors is another. Participative Course De: Supervisors were active throughout each workshop. New concepts and skills were presented deductively (the discovery method) rather 164 ASTD Case Studies: Measuring Return on Invesment, Volume 1than inductively (the lecture method). Links in the instructional chain were small and strong (stimulus-response-feedback links ran an average of six to eight minutes each). Participants worked in subgroups of three or four persons each, thereby giving maximum hands-on learning opportunity to every participant Action Plans The action plans got supervisors to commit their time and resources to transferring new concepts and skills from a workshop to the workplace. These four-page planning sheets also served to forge a partnership between each participant and his or her manager so that new behavior was recognized and reinforced (or maintained) back on the job, Executive Briefing By scheduling graduation day (another session) several months after the course was over, senior management gave participants time to follow through on their action plans and begin to show results. Because managers did not want to be embarrassed by having participants with nothing to report (i.e., no ROI), there was a strong incentive for man- agers to follow through with their supervisors’ action plans. Calculating Costs and Benefits Traditionally, management has been responsible for controlling costs and maximizing benefits. Companies preach that this is “every- body's job,” but they never have supervisors and workers calculate the dollar value of their efforts and their results. By going through this process for each module of the course, participants developed the skills and the habit of thinking as a manager. Teaching Goal Setting Following the introductory module (Your Role as Supervisor), the next two modules taught the do’s and don’ts of setting goals and stan- dards. Without these modules, supervisors and managers would tend to describe wishes or activities when asked for goals. The quality of their action plan goals was much better, because they knew the difference and could evaluate the “measurability” of their goals and standards. Taking Time To Do It Right Training House took a year to create the IMPACT Supervisory Series, and the bottler took more than eight months to implement it Using Action Plans to Measure Return on Investment 165(one month to prepare senior management and four months to run the program, plus waiting three months before graduation day). Many supervisory training programs are run as five-day courses, with little or no opportunity to develop action plans and discuss them with man agers. By scheduling one workshop every two weeks and allowing three months after the course for “germination,” this program yielded a much greater “harvest.” A Footnote The Coca-Cola Company offered the IMPACT program to all bot tlers as the course drew to an end in San Antonio, and by graduation day, 18 bottlers had installed the program. When news of the ROI real- ized in San Antonio reached the bottler community, many more bot- tlers purchased the program. To date, more than 200 franchise bottlers have run the IMPACT Supervisory Series. Questions for Discussion 1. Many organizations still conduct supervisory training as a five-day, Monday-through-Friday program. The bottler allowed two weeks per module, resulting in a 16-week program for the eight modules. What benefits do you see to conducting the training program extensively (i.e., over time), as was done in San Antonio? 2. What would be the benefits of conducting the training program intensively, as a week-long program? 3. What types of programs are best suited to be conducted intensively? ‘What types are best suited to be conducted extensively? Give your rez- sons. 4. All 64 supervisors of the San Antonio bottler were brought together on the same day to report the results of their action plan implementa- tion, resulting in a long day (eight hours) of 64 presentations. Would it have been better to schedule the presentations over two days of four hours each? Explain your reasons. 5. What are the major benefits of scheduling an executive briefing fol- lowing the completion of a course? 6. What do you think is the ideal interval between the end of a course and the scheduling of an executive briefing and graduation day? 7. This case study ends with a list of seven factors that contributed to the success of the supervisory training program. Each is listed below. Indicate your reaction to each by noting how important (ie., relevant and/or necessary) it is to the training programs you are responsible for, and also how likely you are to be able to sell this factor and apply 166 ASTD Case Studies: Measuring Return on investment, Volume |it in your organization. Enter the words high, moderate, or low in Table 3 to indicate your reaction to each factor. Table 3. Reaction to the author's reasons for success. Enter High, Moderate, or Low in the blanks to indicate your response. Importance to Factor fer and ROL Managers as instructors Participative course design Action plan for each topic Executive briefing after course Participants’ calculations of costs and benefits Teaching goal setting Taking time to do it right The Author Scott B. Parry, chairman of Training House Inc., holds degrees from Princeton University (A.B., 1954), Boston University (M.S., 1960), and New York University (Ph.D., 1969). He has conducted workshops for educators and training directors in Africa, Europe, South America, Asia, and Australia and has served many organizations as a consultant. His clients include AT&T, IBM, Ford, GTE, Phillips, Mobil, Dow, Chemical Bank, Kodak, Coca-Cola, Air France, Blue Cross, and McGraw-Hill. Parry has published numerous articles in training and management development journals and addressed meetings of chapters of the American Society for Training and Development throughout the United States. He is author of four books and dozens of published train- ing courses. Parry can be contacted at the following address: Training House Inc., 100 Bear Brook Road, Princeton, NJ 08540. Using Action Plans to Measure Return on Fnvestment 167